MTR braces for more gambling competition from Ohio

Nov 7, 2009 8:41 PM
Staff & Wire Reports | MTR Gaming says it's bracing for more revenue-sapping competition now that Ohio voters have approved a measure allowing construction of four casinos in Cleveland, Columbus, Cincinnati and Toledo. The threat to MTR should begin about four years from now when the new casinos are expected to begin opening. MTR owns struggling Scioto Downs in Columbus as well as Mountaineer Casino, Racetrack & Resort in Chester near the tip of the Northern Panhandle. MTR spent $3.7 million to fight expanded gambling in Ohio.
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"We are clearly disappointed with the outcome," Chief Executive Bob Griffin said in a conference call with analysts. "We believe we have growth opportunities in our existing properties and we're not going to stand still." MTR got a taste of what competition from a brand-new casino can do during the third quarter. Net revenue at Mountaineer dropped 11 percent to $68.9 million, while the take at Presque Isle Downs & Casino in Erie, Pa., ebbed 5 percent to $49.2 million. Mountaineer is about 50 miles from the Rivers Casino that opened in downtown Pittsburgh during the quarter, while Presque Isle is about 130 miles away by car. Company officials said Mountaineer gets 76 percent of its customers from Ohio and 10 percent from the Cleveland area. Presque Isle Downs gets 48 percent of its customers from Ohio, including 23 percent from in and around Cleveland. MTR said it increased marketing costs at Mountaineer during the quarter to cope with the new Pittsburgh rival. Despite the competition, MTR said it earned $577,000, or 2 cents per share, in the quarter compared with a loss of $8.24 million, or 30 cents per share, a year earlier. The 2009 numbers included a $2.8 million pretax charge for refinancing debt and the Ohio spending trimmed quarterly profits 20 cents per share this year. Overall revenue dipped to $119.5 million in 2009, from $130.8 million a year earlier.

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